Winner Takes All

by Christina Binkley

  Wynn married Andrea Hissom a year later, in May 2011, on the same weekend that Kate Middleton married Prince William in London. Clint Eastwood served as best man. The multiday Las Vegas fete was tabloid fodder and was attended by Donald Trump. Wynn acquired a new family that included Hissom’s two sons, Nick and Alex. The weekend of the wedding, Elaine Wynn was reported to be attending Warren Buffett’s annual Berkshire Hathaway investor conference in Omaha.

  She might have been an alpha female, but Elaine Wynn made a fateful error that, like a tiny pebble creating ripples in a pond, set in motion unimaginable events. The Wynns had learned a lesson from Kirk Kerkorian. Splitting their joint stake in Wynn Resorts left each with a little more than 9 percent of the company. Loath to halve his voting block of shares, Steve asked Elaine to allow Steve to vote her shares, and to agree that she would not sell her shares without his permission. She agreed in the more cordial beginning of the divorce. That deal eventually became a burden as Elaine grew independent.

  Chapter Thirty

  ELAINE

  Elaine did not retire with the ladies who lunch. She settled in Los Angeles nearer her daughters and became one of the city’s leading art benefactors, joining the prestigious board of LACMA, the Los Angeles County Museum of Art, in 2011. In 2016, by then cochair of the LACMA board, she pledged $50 million toward construction of a new main museum building designed by architect Peter Zumthor. After her decades of work in Nevada education, the governor of Nevada appointed her president of the Nevada State Board of Education. President Barack Obama appointed her a trustee for the John F. Kennedy Center for the Performing Arts.

  The Wynn Resorts board, packed with longtime friends and associates of Steve Wynn, turned unwelcoming to her. The company had become embroiled in lawsuits involving Kazuo Okada, the Japanese entrepreneur whose investment in the company had helped give birth to Wynn Resorts. Okada complained that he had been forced by Wynn to relinquish his stake at a steep discount. Seeking to invalidate her own agreement, Elaine Wynn filed cross-claims against Okada, the company, and Steve Wynn. In February 2015, the board successfully eliminated her seat as a director, which she had held for a dozen years. She put herself up for reelection but failed to garner enough votes.

  The antipathy pressured people the Wynns had hired and nurtured. “I love them both—I owe my whole career to both of them,” said Elizabeth Blau, the restaurant entrepreneur who with Blau Associates had gone on to operate restaurants in Nevada, Pennsylvania, and Vancouver, and to advise clients from Le Cirque to IHOP. “I have been very careful not to pick a side. But as a woman…” Blau added that she understood Elaine Wynn’s desire to control her own destiny.

  Steve Wynn jetted among his casinos and homes. His stepsons, Alex and Nick Hissom, Instagrammed their lives with him. Alex, a budding singer and songwriter known to his fans as Hizzy, celebrated his twenty-first birthday and the debut of his single “If I Die Young” at the Wynns’ nightclubs Tryst, XS, and Encore Beach Club in 2013. The boys enjoyed the New York apartment overlooking Central Park—its interiors designed by Wynn’s design guru, Roger Thomas, the son of his original mentor in Las Vegas, Parry Thomas. There was a mid-December trip to St. Barth’s, Christmas in Sun Valley, and New Year’s in Las Vegas or cruising the Mediterranean on the Aquarius, Wynn’s ninety-two-meter megayacht with a spacious 13.5 meter beam—or width.

  The Aquarius was custom-built in the Netherlands and named for Wynn’s zodiac sign. He had Roger Thomas decorate the yacht’s interiors. Wynn described the two years of design as “intense,” according to MegaYacht News, a publication that breathlessly covered the yacht’s launch. In an interview about the New York apartment with Architectural Digest, Thomas said he’d used bright nautical blues and yellows in the New York apartment that were much like the Aquarius because the Wynns had spent much of the previous summer on the yacht in Europe and were happiest while cruising.

  The rest of Las Vegas was transitioning hard from the period preceding the 2008 financial crisis. Having brought modern analytics to the casino business, Gary Loveman failed to bring his development plans to fruition. The 2008 buyout of Harrah’s by private-equity groups Apollo Global Management and TPG Capital left the company, now called Caesars Entertainment, debt-ridden and in bankruptcy proceedings. Loveman made an inauspicious exit in 2015. He joined Aetna, the health insurer. He was replaced as Caesars’ CEO by a fellow from Hertz, the rental car company, named Mark Frissora.

  MGM Resorts barely escaped bankruptcy in 2009, when the costs for CityCenter had ballooned to $9 billion, and the condos slated to support it couldn’t be sold. “In 2004, I pitched the board on a mixed-use project,” Jim Murren said in 2018. “That was what almost bankrupted the company.”

  “We didn’t realize how poorly we were run until the recession hit,” Murren said. Now as chairman and chief executive, Murren brought in investors from Dubai, working from Steve Wynn’s former office in Bellagio. Murren started charging for garage parking—a move once considered heretical for Las Vegas resorts, which wanted to make it easy for people to come in and gamble. His resorts stopped giving out plastic straws; cut back on the seven versions of complimentary toiletry sets. He supported green initiatives and art, donating shells from three million oysters on the half shell for reef restoration and engineering the 2016 purchase of Bliss Dance, a forty-foot-tall sculpture created by artist Marco Cochrane that showed at Burning Man, then moving it to a strip of MGM land for a public park, blithely called the Park.

  Kerkorian withered and died aged ninety-eight in June 2015, separated from his fourth wife. He was mourned by Armenian communities around the world while his holding company, Tracinda, began the years-long process of divesting its assets and distributing them to charities.

  What with one thing and another, Las Vegas was losing its titans, and their swashbuckling verve was being replaced with spreadsheets and algorithms. It was not as exciting, but it helped to meet those quarterly earnings forecasts.

  Several years after Wynn married Andrea Hissom, my cell phone rang in Los Angeles. It was breakfast time. “Ms. Binkley, I have Steve Wynn on the line,” said the nasal voice of Cindy Mitchum, the mogul’s implacable assistant. I hadn’t spoken with Wynn since Winner Takes All was published in 2008. He hated the book’s premise—that he had lost Mirage Resorts to a hostile takeover before rebuilding his empire.

  Mitchum transferred the call to Wynn, who launched into a conversation as though we had spoken the previous week. Wynn said he was sitting on a beach in Italy with Andrea, who had been looking at her laptop when an Amazon.com ad for Winner Takes All popped onto her screen.

  Wynn had questions. Who was the winner, he asked, sounding anxious, and it occurred to me that he had been gnawing on this question for years: Was it Kirk?

  Wynn had made Las Vegas the naughty Disneyland of gambling, using the subterfuge of splendor and wholesome activities like shopping, dining, and appreciating art—or watching dolphins leap and pirates battle—to give permission to millions of visitors to let loose of their inhibitions and their wallets. Kerkorian had tried copying him, and when that failed, he bought Wynn’s creations. But Wynn didn’t see that as the measure of winning. For him, the primary issue seemed to be control. The call lasted nearly an hour as he made his pitch—that far from being outmaneuvered, he had wanted to sell Mirage Resorts to Kirk Kerkorian. He shared blow-by-blow accounts of conversations from a decade earlier. He mentioned Elaine several times and made slips of the tongue in which he said “Elaine” when he meant “Andrea.” His conversation lingered on Elaine. He asked me to call him if I decided to write about Las Vegas again. Years passed, and when I finally called, Wynn was in no mood to talk, buried in another avalanche of his own creation. This time, Elaine was a formidable adversary.

  Chapter Thirty-one

  TIME’S UP

  Four days after the January 2018 call with analysts, The Wall Street Journal published a story that changed the futures of Steve Wynn and Wynn Resorts. The story all
eged that Wynn had engaged in sexual misconduct numerous times over many years. Citing few sources on the record, the story said the newspaper’s team of reporters—the four bylines on the story included an investigative reporter, two beat reporters, and the newspaper’s relationships columnist—had interviewed roughly 150 people, some of whom described having sexual relations with Wynn out of fear of losing their jobs. (I had left the casino beat more than a decade earlier and was not involved in the story.)

  The story alleged that Wynn had made a $7.5-million payment to a manicurist after she said he pressured her to have sex with him in his office around the time that Wynn Resorts opened in 2005. In the wake of so many sex-harassment scandals in 2017 and 2018, this would be troubling for any company, but to omit notifying gambling authorities of such an expenditure sets off regulatory alarm bells in the casino industry. Authorities in Nevada and Massachusetts, where Wynn Resorts was building a new casino resort, immediately launched investigations. The Wynn Resorts board of directors formed a committee to make its own investigation the day the story ran.

  Wynn immediately and vociferously denied that he had misbehaved sexually or forced sex on anyone. “The idea that I ever assaulted any woman is preposterous,” he said in a statement. “We find ourselves in a world where people can make allegations regardless of the truth and a person is left with the choice of weathering insulting publicity or engaging in multiyear lawsuits.”

  He suggested there was a revenge motive at play—that the referenced payment had been revealed by Elaine Wynn as part of her legal offense as their case approached a trial date in three months.

  Sexual misconduct allegations had been playing out in the press for months as dozens of powerful men were toppled from high-ranking positions in the media, politics, and entertainment: Hollywood mogul Harvey Weinstein, television journalists Matt Lauer and Charlie Rose, chef Mario Batali, Sen. Al Franken, author Garrison Keillor, comedian Louis C.K., Hollywood producer Brett Ratner, actor Kevin Spacey, and director James Toback. Mentioned, but not toppled, was U.S. President Donald J. Trump, whose Access Hollywood tape recording his famous “Grab ’em by the pussy” comment aired in 2016, helped jump-start the #MeToo and #TimesUp movements.

  Steve Wynn was the most prominent corporate chieftain to have faced such allegations in what was seen as a new movement, and Wall Street shaved $3 billion off of the company’s value in a few days. Wynn’s corporate, political, and public-honorary life began to unravel. Three days after The Wall Street Journal story broke, Wynn resigned as finance chairman for the Republican National Committee. Not long thereafter, someone—assumed to be students—vandalized the Wynn Commons at Wynn’s alma mater, the University of Pennsylvania—which had been paid for with his gift. The university removed Wynn’s name from Wynn Commons and revoked the honorary degree it had awarded him, along with another honorary degree from comedian Bill Cosby. (Cosby would be convicted on three counts of sexual assault three months later, in May 2018.)

  For a time, Wynn behaved as if he could save himself. On February 2, 2018, he was recorded in the casino while conducting talks with employees in which he recycled lines he’d been using for years to raise the loyalties of waitresses, craps dealers, and line cooks. His gravelly voice on the recordings, which were released on the Internet, was unmistakable:

  “What’s magic about this family is you. Oh, my name’s on the sign, all right. But it’s been you. We managed to create this. And the result of that family culture is spectacular. And nothing in the short-term moment can change that, and I don’t want anyone of you to feel that that could happen.

  “This is the time when everybody’s talking about gender [disadvantage]. And there’s a whole popular thing today that maybe women are not being treated right or women haven’t been given the same opportunity as men. And of course, they should be. And there’s never been a gender discrimination problem here. And that’s the thing you can be proud of, because the company history stands for that.”

  Wynn swerved into an anecdote involving the 2016 election of Donald Trump. “I got a call from the president-elect,” Wynn said, his voice going husky and conspiratorial. “This is two nights before he’s president officially. And we stopped at the Trump Hotel where he was having a midnight, or late, supper. We went up to the restaurant on the second floor and he was sitting there with his back against the wall. I looked at him and said, ‘It’s unbelievable, you pulled this off. You risked everything.’”

  Wynn quoted Trump’s reply: “If I knew it was going to be this tough, I wouldn’t have done it. It was so scary. When those tapes came up, I almost died.”

  “Heh-heh,” Wynn chuckled, apparently finding humor in his own discomfort. “I know the feeling.”

  Wynn was, however, unable to save his job. All that was left was to attempt to isolate his own problems from the company. On February 6, Wynn, cornered, resigned as chairman and chief executive of Wynn Resorts. It was twelve days after The Wall Street Journal’s story had broken, and given the arc of his career, it was an extraordinary moment. Few people can claim to have built a company that leads an industry in innovation and dominates the business. Wynn had done it twice. And he had lost it twice.

  In any other era, this fall from grace might have dominated headlines and followed with lengthy tales of what it all meant for gambling and for Las Vegas. But 2018 was a period of news exhaustion: Each day broke with another spate of scandals coming out of Washington, D.C., or the rallying cries that resulted in national marches and were titled with hashtags—#MeToo, #TimesUp, and gun control’s #NeverAgain. Steve Wynn’s departure from the company received its due in the news, but not much more, as events unfolded.

  He was replaced as chairman by his longtime friend and board member Daniel Boone Wayson, whose distress was evident in his public statement: “It is with a collective heavy heart that the board of directors of Wynn Resorts today accepted the resignation of our founder, CEO and friend Steve Wynn.” Matt Maddox, Wynn’s protégé and the then-president of the company, was appointed chief executive—without being given a seat on the board. Wynn would not receive a severance package. He would vacate his suite overlooking the golf course by June 1.

  It was hard for many people—customers and employees—to imagine Wynn Resorts without a Wynn at the helm. No one seemed to question whether Steve Wynn might return. A guest noted on his Twitter feed one day that spring that a bartender at the Wynn’s Parasol bar had confided, “We’re all hoping Mrs. Wynn comes back.” Meaning Elaine Wynn.

  Wynn’s resignation did not stop the avalanche of challenges facing Wynn Resorts and its board of directors. Saying regulators were overwhelmed by tips from the public, Nevada investigators established an online complaint system for the Wynn investigation. Wynn Resorts board director Ray Irani resigned in March, and director Alvin Shoemaker said he would not stand for election when his term came to an end in 2019. They were both longtime friends of Steve Wynn.

  It turned out that the trial in the lawsuit with Elaine would not take place. By March 14, Elaine and Steve Wynn reached an agreement that released them each from the shareholder contract that had created so much strife. Steve agreed to pay Elaine $25 million. Then in another bombshell move—possibly an attempt to sever his regulatory problems from the company’s—Steve Wynn disposed of the entirety of his stake in Wynn Resorts, selling part on the open market and the rest to institutional investors T. Rowe Price and Capital Research and Management, a part of Los Angeles–based Capital Group. The sales were valued at more than $2 billion.

  Matt Maddox later said the sales were negotiated by Wynn Resorts, which raised money to end the Okada litigation by issuing shares to Galaxy Entertainment, a competitor in Macao. Wynn, the casino mogul, was technically erased from the company he had founded, nurtured, and fed, as he said, from his own bulging veins.

  Maddox moved swiftly to establish his independence from his mentor. In a conference call with analysts on April 24, 2018, the newly minted chief executive anno
unced that Steve Wynn’s $3-billion Las Vegas lake-development plan was “not sustainable” and would be cut back. Maddox dissed Paradise Park and its nightly parade and attractions as “a mass market theme park.” Instead, there would be beaches and amenities to serve luxury customers. Without the mass market customers, hypnotized by the proximity of so much luxury, one wondered who would buy the margaritas, show tickets, and steak dinners needed to support the place.

  Maddox revealed that he had delved into Steve Wynn’s happy place with the Wynn Resorts development team. He quickly began to redesign the new resort development that Wynn had honed for more than a decade, shaving $35 million off the planned convention center. This improved the customer experience, he said, without divulging how.

  The company’s most current predicament was in Massachusetts, where gambling regulators questioned how much the board of directors had known about Wynn’s undisclosed payment and the other allegations. The company changed the resort’s name from Wynn Boston Harbor to Encore Boston Harbor, and removed Steve Wynn from its licensing application. Maddox suggested in interviews that he might consider selling the soon-to-open resort if a sale would benefit the company.

  This set the scene for one of the more unusual cases of shareholder activism in memory. Elaine Wynn in April launched a proxy battle with Wynn Resorts to establish a more independent board. She sought to eliminate good friends of Steve Wynn from the board, suggesting their judgment might be compromised. She asked shareholders not to reelect director John J. Hagenbuch, a longtime friend of Steve Wynn who sat on the board committee that was investigating the allegations against Wynn. Elaine suggested that the sale of the Boston resort would be designed more to protect the board of directors from embarrassments or worse that might emerge during oncoming regulatory investigations. She did not seek a seat on the board for herself, or suggest any of her own friends or associates. Her concerns found sympathy with all three U.S. shareholder advocates—Institutional Shareholder Services, Glass Lewis & Co., and Egan-Jones, which issued reports in her favor.